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Osinbajo calls for backward integration in dairy industry

by Business News Report

Vice President Yemi Osinbajo, SAN is encouraging investors in the diary industry to facilitate backward integration in the sector including providing incentives for local diary farmers. Prof. Osinbajo expressed this view when he received a delegation from FrieslandCampina led by its Global CEO, Mr Hein Schumacher. The delegation also included the Netherlands Ambassador to Nigeria, Mr Robert Petri, the Chairman of the FrieslandCampina WAMCO Nigeria, Mr Jacob Ajekigbe and other management staff of the company.

According to the Vice President, “I think that Friesland needs to, on its own, do something because there is really no incentive for backward integration. “I think that there is a need for you to do more in terms of local production and set some timelines. Maybe after six years, you should be doing 70% and not 10%. My view is that if we go at the current rate it will be extremely difficult for the local producers to move up.”

Speaking specifically about the need to develop a robust plan to improve local production across the country. Prof. Osinbajo said “The plan of extending the dairy development programme to other states is extremely important. I just think that backward integration is just so crucial, my worry is the lack of incentives for backward integration.” He advised that “as part of the backward integration, a programme of how to put the farmers in a position where they are able to produce more should be put in place. There should be a very robust plan to encourage cattle breeders to actually increase yields so that we can say, after a particular period, 70% of products should be locally produced but the problem, I must say, is still the lack of incentives,” Prof. Osinbajo added.

He, however, assured the company of the Federal Government’s readiness to support it to actualize set business objectives while urging for better synergy between the public and private sector.  Earlier in his remarks, the Global CEO of FrieslandCampina, Mr Hein Schumacher said the company, established in Nigeria since 1973 has developed a plan to grow Nigeria’s local dairy industry through a small holder farmer dairy programme. He however appealed to the Federal Government to support the company’s development plan by improving infrastructure in its operational base in Oyo state and also providing tax incentives for its new investments.

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